European shares steady as trade talks, U.S. politics fuel uncertainty

LONDON (Reuters) - European stock markets ended broadly flat on Wednesday in a session of choppy trading amidst trade talks between the U.S. and China and uncertainty over U.S. President Donald Trump’s legal woes.

FILE PHOTO: The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, March 21, 2018. REUTERS/Tilman Blasshofer

The pan-European STOXX 600 was flat in percentage terms at its close as investors waited to see whether the United States and China could make progress towards resolving their trade conflict.

Political developments in the United States have had limited effects, at least so far. U.S. President Donald Trump’s former lawyer, Michael Cohen, pleaded guilty to campaign finance violations on Tuesday and former campaign manager, Paul Manafort, was found guilty on charges of tax and bank fraud.

“Stock markets are mixed as trade talks still dominate the headlines,” David Madden, market analyst at CMC Markets UK, said in a note.

While a rise in the oil price boosted oil stocks .SXEP and miners .SXPP also powered ahead, autos .SXAP were notable underperformers.

The sector dropped more than 3 percent and was on track for its biggest daily fall since the Brexit vote in June 2016 after automotive supplier Continental AG (CONG.DE) dropped more than 14 percent on the back of a profit warning.

“While most profit warnings are by definition a surprise, this one is all the more concerning as most of these headwinds were flagged and should have been evident when the company reported H2 results on 2 August; higher warranty costs being an exception,” analysts at Jefferies said in a note.